Your solar quote may be priced on rules that no longer exist

The savings number on page one of a solar proposal rests on an assumption most homeowners never see stated: what your extra power is worth. In a growing number of states, that assumption is now wrong by a factor of three or four.

The assumption hiding in every proposal

Solar panels make the most power in the middle of the day, when most people are not home using it. That surplus goes out to the grid. What you get for it determines whether a system pays off — and it is the single most consequential number in a solar proposal that almost never appears in the proposal.

For about two decades the answer across most of the country was simple: full retail credit. A kilowatt-hour you sent out was worth exactly one you bought back later. Your meter effectively ran backward. Under those rules, sizing a system was easy — build it as large as the roof allows, because every kilowatt-hour has the same value whether you use it or sell it.

That arrangement is going away, state by state, and the sales material has not kept up.

What changed, and where

Utilities argued for years that full retail credit shifts costs onto customers without solar, since the retail rate includes the cost of poles, wires, and maintenance that a solar exporter still relies on. Regulators in a number of states agreed, and replaced retail credit with something lower.

California made the sharpest move. Under the current net billing rules, exported power earns roughly an hourly wholesale value rather than the retail rate — in practice about 20 to 30 cents on the dollar compared to before. The change survived a legal challenge and is not being reversed.

Others have moved partway:

Texas belongs in its own category: there is no statewide rule at all. What you're paid depends entirely on which retail electricity provider you're with, and offers range from full one-for-one credit to nearly nothing, sometimes paired with a high monthly base fee that quietly eats the benefit.

This is also not a settled picture. In a single recent quarter, states took more than fifty separate regulatory actions on net metering. Connecticut and Maryland both had successor programs mandated by their legislatures this year. A quote written eighteen months ago may already describe a world that no longer exists.

Why this changes how a system should be designed

Under full retail credit, a bigger system is straightforwardly better. Once surplus is worth less than retail, that stops being true, and two things follow.

Oversizing becomes a waste of money. If your panels produce far more than your home consumes, the extra panels are being sold at wholesale rates. You paid retail prices for equipment generating wholesale-value power. In California, a system sized well beyond a home's actual usage can have a meaningfully worse return than a smaller one on the same roof.

Batteries stop being a luxury add-on. A battery lets you store midday surplus and use it in the evening, turning power worth 8 cents exported into power worth 35 cents avoided. In full-retail states that math is marginal. In net billing states it is often the difference between a system that pays off and one that doesn't.

Three questions to ask before you sign

• "Which tariff will this system interconnect under, in writing?" Not which one exists today — which one applies to your system, given when it will be connected. In several states the rules are locked in at the moment of interconnection, so a delayed install can land you on worse terms than you were quoted.
• "What did you assume my exported power is worth?" A straight answer is a good sign. Vagueness, or an answer that amounts to "your meter runs backward," means the projection should be treated as marketing.
• "What happens to the savings estimate if that number is wrong?" Any honest proposal can show you the downside case. If the whole pitch collapses when one assumption moves, that is worth knowing before rather than after.

If you're already grandfathered

Rule changes generally protect existing customers. If you interconnected under earlier rules, you typically keep those terms for a fixed period — often ten to twenty years, depending on the state. That protection usually attaches to the system and the property rather than to you personally, which makes it a real asset when selling a home, and one that is frequently left unmentioned in listings.

It also cuts the other way. If you are buying a home with solar already on it, the terms that system operates under may be far better or far worse than what a new system would get, and that difference belongs in what you're willing to pay.